Using Daily Reports to Prove Construction Claims

One of the basic, yet most important, aspects of project documentation includes effective use of an on-going and detailed set of daily reports. Too often, daily reports are submitted to the contractor’s office merely noting the date, the weather, a broad description of the work being performed, and sometimes, a listing of employees and equipment present. This type of report will usually prove insufficient to support a request for additional compensation or change order claim.

Even on a perfect day, when no problems arise and production is favorable, effective project management principles require more detailed reporting. Here are some tips when training your project team about daily reports:

Report the normal and the abnormal. Construction personnel are often–erroneously–led to believe that daily reports should be long and detailed only on those days when owner-caused problems are encountered. Admittedly, contractors can claim success when they devise a system that provides detailed reporting on days problems occur. But frequently, daily progress reports are used as a means of proving what happens on the project when things are normal. For example, suppose a utility crew’s daily progress is adversely affected by an unexpected obstruction, the risk of which you did not contractually assume. To prove the obstruction slowed the crew’s production, you may present: (a) your original estimate showing anticipated production; (b) notes on each daily report estimating how much additional production could have been achieved for the day but for the obstruction; or (c) daily reports indicating actual production for the same work when it was free from interruption.

Other projects may be relevant. Being able to produce daily reports detailing other projects with similar conditions and degrees of difficulty will place the contractor in a better position than merely presenting the project estimate. At the very least, the daily reports from another project will add legitimacy to the estimate and remove some of the owner’s skepticism of paying out claims based on the total cost approach.

Include work categories and/or cost codes. Daily reports should include the hours each employee and piece of equipment worked on the project by work category or cost code. In addition, the locations where the work was performed should be recorded. For larger companies with payroll or personnel departments, the daily report should be a multi-copy form so it is not tied up routing through various departments. If the project is large, or if work is being performed by crews, each crew should complete a separate daily report. Reports should be designed to operate as checklists. The checklist format prompts supervisors in every category of information desired.

Finally, contractors should demand that daily reports remain just that: daily! Allowing supervisors to fill reports out at the end of the week leaves too much to memory and is certain to result in inaccurate and brief reports. When supervisors are allowed to fill out reports from personal diaries, the mental prompting so important to accurate reporting is lost. In addition, after-the-fact reporting may result in a court refusing to admit such reports as evidence.